Question

Attending college involves incurring many costs. Select the example of a college cost that could be assigned to each of the following classifications

Choices to fill in the blanks on the table:

-cost of attending one college versus another

-cost of books

-social organization dues

-tution cost per course for a full time student, or cost per meal on the colleges meal plan

-tuition for prior semesters

-wages foregone while a student

a.	Sunk cost
b.	Discretionary cost
c.	Committed cost
d.	Opportunity cost
e.	Differential cost
f.	Allocated cost

Answer 1

-cost of attending one college versus another- Differential cost

(This is the difference in costs of the colleges)

-cost of books-(Committed cost)

(This is cost that is expected to continue over the tenure of being a student)

-social organization dues- Discretionary cost

(Cost that can be avoided in the short run )

-tution cost per course for a full time student, or cost per meal on the colleges meal plan – Allocated cost

(Cost allocated to a student or to a meal per student)

-tuition for prior semesters- sunk cost

(this is cost already incurred and cannot be recovered)

-wages foregone while a student-Opportunity cost

(It is cost of one option lost due to taking up another)